While e-mail has become a well-established part of the marketing mix, it continues to be fraught with myriad challenges, including a shortage of prospect names and the cost of lists.
Limited e-mail list quantities present a big problem, b-to-b marketers say.
"From a list management standpoint, there aren't too many e-mail lists out there in the marketplace," said Eric Snider, exec VP at SkillPath, a catalog direct marketer of training programs and seminars that uses multiple channels, including e-mail, to market to customers. "A lot of list marketers would like to play a role in it, but the e-mail names to rent are pretty limited."
Even though he laments the lack of names available for rental, Snider noted that marketers want to protect customers' e-mail identity in order to preserve their relationships with them.
"Everyone is saying their customers are valuable, and the last thing you want to do is rent names out," Snider said, adding that SkillPath does not make its names available in the marketplace.
legal challenges
Ongoing problems with spam and phishing, and the challenges of staying on the right side of federal laws, have also contributed to e-mail's stunted growth. Many marketers are extremely conservative, e-mailing only those people who are established customers.
"E-mail is still largely a retention vehicle rather than an acquisition vehicle," said Ed Bocknik, exec VP-e-commerce services at list company Direct Media. To get around that, his company is exploring lead generation programs and new product ideas to build e-mail lists.
Despite the hurdles, many marketers are prospecting for new customers through e-mail.
Dave Haucke, VP-global marketing at ISYS Search Software, which markets low-cost search engine software to corporations, has done prospecting using e-mail. "We're conducting e-mail campaigns with lists we get from CNET and other publications, where we promote a white paper," he said.
ISYS has dropped postal mail marketing entirely, Haucke said. "Our feeling is we need the shortest distance between the user and the download screen on our Web site, and the quickest way to get there is some electronic activity," he said.
Computer Associates is another marketer doing e-mail prospecting. "We do both [prospecting and retention]," said Michael Paradiso, VP-marketing. "Obviously we're compliant with all the privacy laws. We use Harte-Hanks and a couple other sources."
SkillPath's Snider said direct mail is still the name of his game. "The volume [of responses] still all comes from direct mail," he said. "It's all direct mail because of the prospecting issues."
Deb Goldstein, president of IDG List Services, a list manager and list owner, said that while b-to-b catalogers are "one market segment that has not embraced e-mail," she has observed "product-oriented hardware, software and business continuity products and services are using e-mail for the purpose of lead generation." She said she has seen a lot of new e-mail business recently.
Declining list prices
An analysis of BtoB's annual List Managers chart (see pages 30 and 32) shows a small number of list managers have lowered their e-mail prices from where they were a year ago.
Some executives in the industry say many list companies are going off the rate card to give e-mailers a better deal.
Jay Schwedelson, corporate VP at list manager Worldata, characterized the current climate as "a lot of Wild West negotiations going on behind the scenes." He estimated discounts, depending on the situation, range from 5% to 40% off rate card pricing.
Schwedelson attributed the discounting to many factors, including content blocking and deliverability. "It has been an inflated CPM for so many years," he said. "It has been a long time coming."
Goldstein agreed that price negotiations are widespread. "There's no question there's a lot of negotiation," she said.
"It's across the board. The biggest reason is ultimately we're in the business of ROI. Response rates are very challenged, and the list has to work for the price that you pay for it." M
